Health Plan Weekly

Cigna Raises Long-Term Earnings Projections, Cites Specialty as Driver

During its March 7 Investor Day, The Cigna Group raised its long-term earnings projection and highlighted the diverse offerings it believes will win client business and differentiate itself from competitors. The company placed particular emphasis on opportunities in the specialty pharmacy area, where it already has a strong foothold and plans on expanding in the coming years.

Cigna increased its long-term adjusted earnings per share (EPS) guidance range to an average growth of 10% to 14% per year, up from a range of 10% to 13%. For 2024, it kept its adjusted EPS target of at least $28.25, up from $25.09 last year.

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Change Healthcare Faces Lawsuits, Could Lose Clients After Data Breach

UnitedHealth Group could face significant financial and legal consequences amid the ongoing cyberattack on its Change Healthcare subsidiary. A federal regulator is investigating the diversified health care giant for possible HIPAA violations; patients and providers have filed lawsuits; and the firm was forced to suspend prior authorization in many cases, which may hurt the bottom line of its UnitedHealthcare insurance arm, according to Wall Street analysts.

In addition to these immediate problems, Change Healthcare may lose the leading position it holds in its areas of operation. Some providers and insurers have already begun to switch to other revenue cycle management platforms and claims clearinghouses, one expert tells AIS Health, a division of MMIT.

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Medicaid Officials Warn Insurers: Reform Prior Auth Before Politicians Do

Speaking at an AHIP conference in Baltimore on March 13, two state’s top Medicaid officials shared frank views about the tensions that arise from working with private managed care plans to run their Medicaid programs — especially as scrutiny of insurer practices like prior authorization is intensifying.

“We talk a lot internally about the fact that if I were to stand somebody from my agency — the Medicaid agency — next to somebody from a Medicaid managed care company, from a mission perspective, you will not see a single difference between the two,” said Jay Ludlam, deputy secretary of NC Medicaid, during the AHIP Medicare, Medicaid, Duals & Commercial Markets Forum.

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Oscar, Clover, Alignment Make Progress Toward Profitability

The software-focused startup insurers known as “insurtechs” last year made tangible strides toward reaching profitability, according to their full-year earnings reports, backing up their executives’ statements that 2024 may see break-even results or better.

Financial institutions generally took a positive view toward Oscar Health Inc., Alignment Healthcare Inc. and Clover Health Investments Corp., but some analysts tempered their praise by pointing out holes in the firms’ growth and profitability strategies.

One former insurtech, the erstwhile Bright Health Group, Inc., exited the insurance business altogether, and now operates as a care delivery-focused business under the name NeueHealth.

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Hacking, Ransomware Continue to Plague Health Care Industry

The Biden administration has launched an investigation into UnitedHealth Group following the cyberattack on its subsidiary Change Healthcare, which caused significant disruption in payments and claims processing for pharmacies and health systems across the nation. Cyberattacks targeting the nation’s largest insurer — UnitedHealthcare — have been on the rise in recent years and exposed almost 750,000 patient records in 2023 alone, according to the HHS Office for Civil Rights (OCR).

Since 2010, UnitedHealthcare reported 21 data breaches to OCR that affected more than 829,000 members, with six of them caused by hacking or IT incidents. As of March 14, the most recent Change Healthcare data breach has not been filed to the OCR breach portal. To meet the requirements of the HIPAA Breach Notification Rule, OCR must be notified within 60 days of the discovery of a data breach.

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News Briefs: Medicaid MCO Pay Raise Set to Rise in Some States

At least seven states plan to raise capitated payment rates to their contracted Medicaid managed care plans in fiscal year 2025, Modern Healthcare reported. Craig Kennedy, president and CEO of Medicaid Health Plans of America, told the publication that the rates are likely going up “because utilization is increasing post-pandemic.” The article noted that Arizona has proposed a 3% rate increase, California's draft budget includes a 3.8% hike and Missouri is considering a 2.5% raise for managed care plans. But New York plans to reduce insurer compensation by eliminating a quality bonus program and a 1% pay increase that expires this fiscal year.

Doctors are raising the alarm about how health insurers are making it harder for patients to receive coverage for at-home ventilators, the Associated Press reported. The noninvasive ventilators help patients breathe by forcing air into the lungs, often through a mask, and they cost around $1,200 per month. Chuck Coolidge, chief strategy officer for the respiratory supply company VieMed, told the AP that insurance rejections — including both initial approvals and reauthorizations — have increased for patients with Lou Gehrig’s disease and chronic obstructive pulmonary disease. And one neurologist told the news outlet that UnitedHealthcare Medicare Advantage plans now deny nearly all initial requests for the ventilators.

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Feds Target Private Equity — and Payer — Investment in Providers

The Federal Trade Commission, Dept. of Justice and HHS on March 5 released a request for information (RFI) on private equity (PE) and “other corporations’” — including payers’ — ownership of health care providers, citing concerns over patient and worker safety, consolidation, and escalating costs. In a public event held that day, the agencies presented a deeply negative view of providers currently owned by PE and tipped further enforcement actions — including a heightened emphasis on legal coordination with state antitrust regulators.

The investigation is just the latest in a series of ambitious health care antitrust moves by the Biden administration. The FTC has also launched investigations into PBMs, while the DOJ tried to block notable transactions like UnitedHealth Group’s acquisition of Change Healthcare — and in October launched a broad antitrust investigation into UnitedHealth itself, which became public in recent days. The text of the new RFI said it “complements” CMS’s recent, separate RFI on Medicare Advantage.

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News Briefs: Biden’s State of the Union Touches on ACA, Drug Pricing Reform

President Joe Biden’s health care agenda figured prominently in his State of the Union address on March 7. Regarding the Inflation Reduction Act, the president said he wants to increase the number of drugs subject to Medicare price negotiations to 50 per year, up from 20 under current law. Biden also said he wants to expand the IRA’s $2,000 annual out-of-pocket cost cap for prescription drugs and $35 monthly copay cap for insulin to commercial plans, as they currently only apply to Medicare Part D. Additionally, the president vowed to defend the Affordable Care Act from repeal attempts and make the expanded subsidies that are set to expire after 2025 permanent.

The White House on March 5 unveiled a “strike force” aimed at cracking down on unfair and illegal pricing, focusing on sectors including prescription drugs and health care, food and grocery, housing, and financial services. Set to be chaired by the Dept. of Justice and Federal Trade Commission, the strike force “will strengthen interagency efforts to root out and stop illegal corporate behavior that hikes prices on American families through anti-competitive, unfair, deceptive, or fraudulent business practices,” the Biden administration said. The White House simultaneously announced that its Competition Council will soon unveil new actions aimed at slashing credit card late fees, combating high internet costs and supporting small farmers; previously, the council helped drive HHS actions such as cracking down on problematic Medicare Advantage marketing practices.

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Surveys Reveal Mixed Findings on Employees’ View of Their Health Plans

Privately insured enrollees are generally satisfied with their health plan selection process and benefits, according to recently released data from the Employee Benefit Research Institute (EBRI) and Greenwald Research.

The Consumer Engagement in Health Care Survey found that the majority of adults surveyed obtained their health insurance coverage through their job or a spouse’s job. Most individuals said they were satisfied with various aspects of their health plan coverage. Over half of enrollees were extremely or very satisfied with their open enrollment process.

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UnitedHealth Sets Dates for Restoring Change Healthcare Systems

UnitedHealth Group faces a crisis as the fallout from the hack of its Change Healthcare subsidiary continues to spread. The firm is rumored to have paid $22 million to the hackers who may have caused the breach, even as it faces falling stock prices, federal actions to stabilize provider reimbursement, payer operations disrupted by the hack, and legal risk.

A civil suit has already been filed against UnitedHealth due to the cyberattack, and the scale of the disruption may strengthen enforcement action resulting from a newly revealed federal antitrust investigation into UnitedHealth. Because of the cyberattack, payments to thousands of providers have stalled, causing a liquidity crisis for some practices. The hack also may have exposed thousands of other health care entities to data breaches. UnitedHealth’s stock price dropped from $521.97 on Feb. 21 (the day the breach was disclosed) to $478.78 at the close of business on March 7.

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